One of the biggest challenges companies face today is how to evolve with the digital era to stay relevant. Technology trends like the Internet of things (IoT), big data and machine learning are reshaping entire industries. But nearly half of insurers worldwide say they lack an achievable plan to carry out a successful digital transformation.

The insurance industry is trailing behind other industries when it comes to adopting digital tools and business models. According to Forrester, only 27 percent of today’s businesses have a coherent digital strategy that sets out how the firm will create customer value as a digital business.

The biggest challenge driving digital innovation for most companies is vision. Many digital insurers believe that they need to deliver a breakthrough digital product in order to execute a successful digital transformation. In addition to overlooking opportunities to drive value through adjacent innovation, they are missing opportunities to digitize their internal operations, which are just as important and can help create a foundation for more disruptive innovations.

According to George Westerman, Research Scientist with MIT Sloan, there are three categories of digital transformation: customer experience, operational processes, and business models. Digital insurers need a baseline of internal process digitization in order to deliver customer-centric experiences and ultimately transform their business models. And although customer experiences are the most visible, and arguably the most exciting, there are strong benefits from transforming internal processes through process digitization, work enablement and performance management.

So why not just transform all categories at once?

You can’t boil the ocean when it comes to digital transformation. If you try to do everything at once, you will fail for two reasons:

It’s too much to swallow at once. The digital insurer simply cannot manage that much change at once. The sheer size of the initiative will inevitably force it to stall.

Change is too disruptive without proof. People are only so willing to change based on hypothetical situations. They need to see proof with their own eyes before committing to such a large-scale change across the entire organization.

This is exactly why we created our Digital Transformation Framework. The framework was built to help digital insurers do the right things at precisely the right moment, with three distinct phases: Start, Structure and Scale. The first step towards your digital transformation should be starting small. In the beginning of your digital transformation, it is all about proof and celebrating success. You want your first project to be a catalyst for success.

In our upcoming webinar featuring Rob Llewellyn, founder of CXO Transform, we’ll share insight into how insurers can launch, manage and govern their digital transformation. A key topic that we’ll discuss with Rob is creating a balanced innovation portfolio, with a focus on business value.

While it might be tempting to jump right into building a large, customer-facing app, the sheer size of the project and lack of organizational readiness will likely stall it altogether. Instead, digital insurers need to evaluate and prioritize their portfolios based on the complexity and intended audiences of the applications. Ultimately, their roadmap should focus initially on delivering low-complexity (but still high-value) apps. Then, once they have a few successes under their belt, they can start to tackle larger initiatives.

Often, operational efficiency is a good starting point for insurers because the insurers aren’t as complex and tend to focus on an individual business unit or department. Typical initiatives include digitizing and automating your claims management process, or automating broker workflows by taking the manual spreadsheet process and introducing a digital work management system.

By transforming these operational processes, you are forming the building blocks to transform customer engagement and business models as well. For example, digitizing claims management can enable end users to access this data via self-service portals from their mobile or desktop. Or investments in straight-through processing could help lay the foundation for new digital products.

With the rise of insurtechs transforming the industry, and the pressure to incorporate new technologies within your business, disruptive innovation is not the best place to start when undergoing a digital transformation.

Focusing on transforming internal operations is low-hanging fruit that can get you started successfully. These are often the opportunities that are right under insurers noses, and they can often be the most helpful transformations to take the organization to the next level.